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Thread: Company beats IRS penalties with Lawful Money

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  1. #1
    JohnnyCash
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    Company beats IRS penalties with Lawful Money

    Here's a traditional corporation, with EIN, bank account & W4/W2 employees - your typical small business ensnared in the system. The company was a weekly depositor of federal withholding & employment taxes. For example, If payday was Tuesday then company was required by statute to pay US Treasury the following Tuesday. In 2011 company was late with payments (some weeks over a month late) and racked up penalties over $4800. Here's the timeline, attachments are below...

    April 2012- IRS sends CP161 notice (Company ignores that one)
    June 2012 - IRS sends CP504B letter, Notice of Intent to Levy (yeah whatever)
    July 2012 - IRS sends FNOITL, Final Notice Of Intent To Levy

    Are you thinking this should be an easy win for the IRS? that they'll steamroll right over the company? No so fast, the company was experimenting with redeeming Lawful Money. Company calls the IRS to negotiate a deal, rep says cannot do it, suggests the Form 843. So in July 2012 company files that Request for Abatement. They attach several reasons (Line 7), most were pretty lame in my estimation, one cites the weak economy and one only asks for 1-day subtraction & recalculation of penalties. Except one argument was, I'm paraphrasing, "our bank account contains lawful money pursuant to 12 USC 411 and you shouldn't assume it's yours to take. Legal issues may result ...". Company also attached copy of a stamped lawful money bank deposit.




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    Last edited by JohnnyCash; 09-12-12 at 03:38 AM.

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